Assigned to JUD FOR
COMMITTEE
Assigned to JUD FOR
COMMITTEE
ARIZONA STATE SENATE
Fifty-Third Legislature, Second Regular Session
Purpose
Makes changes to procedures governing trusts and probate.
Background
The Arizona Rules of Probate Procedure (ARPP) govern procedures in all probate proceedings, including guardianships, conservatorships, decedents' estates, trusts, and related matters, as well as proceedings to challenge or enforce the decision of one authorized to make health care decisions for a patient. The ARPP is construed and enforced to ensure the prompt, efficient and just resolution of probate proceedings (AZ ST PROB Rule 1). The ARPP applies to probate proceedings brought under Title 14 of Arizona Revised Statutes and supplements, rather than replaces, the Arizona Rules of Civil Procedure (ARCP).
The Arizona Trust Code (ATC) applies to express trusts, charitable and noncharitable trusts and trusts created pursuant to statute, judgments or decrees (A.R.S. § 14-10102). Statute permits a trustee to give a person other than a beneficiary a certification of trust instead of a copy of the trust itself. A certification of trust contains limited information about the trust as specified in statute. The recipient of a certification of trust may require the trustee to provide copies of additional excerpts of the trust that state the trustee's powers with regards to a pending transaction (A.R.S. § 14-11013).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Probate Procedures
1. States that the ARPP, rather than the ARCP, govern formal Title 14 proceedings.
2. Provides that no-contest clauses in wills are unenforceable when probable cause exists for the contest in actions rather than in proceedings only.
3. Provides that devisees, not only heirs, may commence a formal probate proceeding after notice that informal probate has begun.
4. Clarifies that notice by publication related to a formal probate must be made at least once 14 days before the hearing on the formal probate petition begins.
Arizona Trust Code
5. Stipulates that a clause in a trust instrument that prohibits an interested person from contesting the trust is unenforceable if probable cause exists for the contest, proceedings or action.
6. Specifies that the definition of mandatory distribution includes distributions by a trustee for reaching a stated age and a distribution made pursuant to the exercise of a power of withdrawal.
7. Provides that a person is not a qualified beneficiary, distributee or other beneficiary for the purposes of receiving specified notices about the trust if specific distributions to that person have already been made or satisfied.
8. Prohibits a person who received a certification of trust from requiring the trustee to provide copies of certain excerpts from the trust unless the requesting party first provides a verified statement for the reasonable basis of the request.
9. Provides that a person acting in reliance on a certification of trust without actual knowledge that the certification terms are incorrect is not liable for acting on those terms.
10. States that it cannot be inferred that a person has actual knowledge of trust terms by the fact that an employee of that person has a copy of the trust instrument.
11. Stipulates that a person making a demand for a trust instrument from a trustee after receiving a certificate of trust may be liable for costs, expenses and attorney fees for not acting in good faith or not complying with statutory requirements.
Miscellaneous
12. Makes technical and conforming changes.
13. Becomes effective on the general effective date.
Prepared by Senate Research
January 30, 2018
JA/lat